Top Asset Classes: July 2022 Performance Analysis

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The majority of major asset classes rebounded in July, relieving a long streak of red ink, based on a set of proxy ETFs. The challenges that sparked widespread selling in global markets this year remain in effect – the war in Ukraine, high inflation, rising interest rates and a slump in economic activity. This toxic mix will continue to create headwinds for the markets, but for at least a month, the gloomy sentiment has taken a vacation.

US stocks (VTI) led the rally, jumping 9.3% last month – the first monthly gain since March. Despite a strong monthly rebound, US equities remain deep in the red since the start of the year: VTI is in the 14% hole in 2022.

Although most markets around the world rose last month, there was no relief for emerging market (VWO) stocks, which edged down 0.8% in July. Commodities (GSG) and Emerging Markets Government Bonds (EMLC) also lost ground.

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The Global Market Index (GMI) joined the relief rally in July. This unmanaged benchmark (maintained by CapitalSpectator.com), which holds all major asset classes (except cash) in market value weightings, rose 6.6% last month, although this portfolio strategy index is still down nearly 14% so far in 2022.

Comparing GMI’s performance with that of US stocks and bonds over the past year illustrates the strength of the rally in July in relative terms. The strong rallies look encouraging, but it’s not yet clear if the downtrend lines are out of breath.

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.

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